Canada’s capital cost allowance landscape is changing. New and proposed measures could allow businesses to immediately expense a much broader range of capital investments, potentially reducing the upfront tax cost of acquiring eligible property.

In Canada’s Shift to Accelerated Capital Expensing, Jennifer Hanna, Doug Ewens, Barrett Schultz and Sergio Plazas examine the existing accelerated-expensing rules as well as the Government of Canada’s proposed Productivity Mega Deduction, announced September 15, 2026. If enacted as proposed, the measure would provide a permanent 100% first-year deduction for most depreciable property acquired on or after September 15, 2026, subject to specified exclusions and conditions.

The article looks at what businesses should know, including:

• the difference between standard capital cost allowance and accelerated expensing;
• the temporary Productivity Super Deduction introduced in 2025;
• the proposed permanent expansion under the Productivity Mega Deduction;
• which types of capital investments may qualify; and
• important exclusions and conditions businesses should consider when planning future investments.

For businesses considering significant capital expenditures, the timing and classification of an investment may have meaningful tax implications. The article explains the proposed changes and some of the factors businesses should consider when evaluating upcoming capital investments.

Read the full article: Canada’s Shift to Accelerated Capital Expensing: A New Era for Capital Investment in Canada

Need help navigating Canada’s changing capital expensing rules?

If your business is planning a significant capital investment or considering how the new and proposed accelerated-expensing measures could affect upcoming decisions, our team can help you understand how the rules may apply to your circumstances.

Contact Jennifer Hanna, Doug Ewens, or Barrett Schultz to discuss eligibility, asset classification, investment timing and other tax considerations associated with Canada’s accelerated capital-expensing measures.